Board transfers Wendell Falls agreement to Newland Communities

jwhitfield@newsobserver.comOctober 17, 2013 

— Town commissioners sat through a 20-minute presentation Monday night, Oct. 14, before taking about 20 seconds to approve a request that makes Newland Communities responsible for meeting the guidelines of a development agreement for Wendell Falls.

The move signals the beginning of the end of bankruptcy for the 1,400-acre, 4,000-home development in Wendell. Work on the project, which is expected to more than double Wendell’s population when it is complete, stopped abruptly in 2008. That’s when Wachovia Bank, which financed the project, called in a line of credit, effectively drying up the resources of Mercury Development and forcing the project into foreclosure.

But on Monday night representatives of Newland Communities breathed new life into the effort.

Bill Mumford, the company’s regional manager, told commissioners that his firm is still researching many of the details, but he said the previous developers and the town have already taken care of a lot of the details.

“Going through our review of a project like Wendell Falls, we evaluated a lot of what you’ve put in place already,” Mumford said. “You have done a tremendous job of teeing this project up to make it very successful. You’d taken a lot of the homework that we would do and you’ve done a tremendous job,” Mumford said.

The developer’s agreement, which was the subject of Monday night’s action, spells out the obligations regarding payments for water and sewer service and sets a schedule for how much water the developers will require during each year of the project’s build out.

Transferring the developer’s agreement from Redus to Newland Communities is one technical step that had to take place before the sale closes.

Mumford, citing confidentiality agreements with Redus, declined Wednesday to say when the sale is expected to close.

Local observers have been speculating in recent weeks that a sale could be imminent following Redus’ decision to complete work on Wendell Falls Parkway, which has never been open to traffic despite the completion of exit ramps off the Knightdale Bypass. That work began last month and Town Manager Teresa Piner said Wednesday a lot of progress has already been made.

Commissioners have also been meeting in closed session following several recent meetings to discuss matters dealing with the development.

A big relief

The possibility that an acceptable suitor might be ready to close on the deal has been a monkey off the back of many at town hall. Piner said the development is important to more than just the town of Wendell.

“(Monday) night was very important not only to the town of Wendell, but to all of eastern Wake County. A development of this size is going to set the tone. I’ve looked at this from a regional perspective. It’s about sustainability, livability. I have worried about who will be the buyer,” Piner said.

“How many communities ever get a brand new entranceway into their town? I get so excited because, if I was a painter, this would be like starting with a fresh, blank palette.”

The possibility that a new developer could reinvigorate the project also eases some pressure on the town when it comes to meeting its obligations under the water and sewer merger with Raleigh. Though Piner said it would be some time before the town saw any significant increase in its tax base, the start of development could give the town options for dealing with the financial terms of the merger agreement. Last year, commissioners approved a payoff plan with the city of Raleigh that requires steep hikes in the water and sewer rates the town charges water customers. If the project begins again, it would provide additional revenue that could allow the town to pay off the merger earlier or reduce the size of future rate hikes.

What comes next?

Piner also said the start of construction in Wendell Falls would place other pressures on the town, including the need to hire additional staff in both the planning department and the police department.

Mumford said buildout of the project would take 10 to 12 years. At that rate, builders would construct between 350 and 400 homes a year. Piner said it’s possible Newland could request changes in the planned unit development agreement, which sets rules for how the subdivision will be developed.

Mumford also said his company plans to study the market with an eye toward meeting the demands of buyers. Whether that means smaller, less expensive houses remains to be seen, but Piner does not expect significant changes to the plan put forward by Mercury Development.

“We expect to offer several different price points in this neighborhood,” Mumford said. That was also expected to be the case when Wendell Falls was first proposed, with homes starting in the $240,000 range and rising above $1 million.

“We looked at the company’s financial solubility, the kind of projects they build and we feel pretty comfortable with their work,” Piner said. The company is currently building homes in the Briar Chapel neighborhood in Chatham County. That project drew strong criticism when it was proposed several years ago, but Mumford and Piner agree that the product that has grown from the development has been well received.

“When we went back to Chatham County to request some changes to the plan last year, some of the people who had been vocal critics of that project lined up at the microphone to speak in favor of our request,” Mumford said.

 

Whitfield: 919-829-4823; Twitter: @easternwakenews

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